Long story short: Beat on revenue, beat on earnings. But there is some concerning news: Venmo “only” grew total payment volume by 93%…LOL, I think that’s the first time since PayPal went public that it didn’t grow payment volumes over 100%. All in all, everything looks great on the surface. Shares are up about 3% in AH trading. On absolute basis, PayPal also added more new accounts than ever before for a quarter.
Here’s how the company did compared with what Wall Street expected:
EPS: 46 cents vs. 43 cents expected, according to Thomson Reuters
Revenue: $3.24 billion vs. $3.18 billion expected, according to Thomson Reuters
In the year-ago quarter, PayPal reported earnings of 35 cents, representing 31 percent growth year over year. Revenue grew 21 percent from $2.67 billion a year ago.
The payment company also raised its full-year outlook. It now expects earnings of $1.86 to $1.88 per share on revenue of $12.92 billion to $12.98 billion.
Read the entire article at https://www.cnbc.com/2017/10/19/paypal-earnings-q3-2017.html…
From the earnings release:
“PayPal delivered one of its strongest quarters since becoming an independent company. Putting our customers first in everything we do, enhancing our suite of products and services, and partnering with some of the world’s most popular brands are delivering tangible results,” said Dan Schulman, President and CEO of PayPal. “In addition to our solid financial performance, we also reported record customer growth with the addition of 8.2 million net new actives. As the world rapidly accelerates to digital payments, we have a tremendous opportunity in front of us.”
See the entire release at https://investor.paypal-corp.com/releasedetail.cfm?ReleaseID…
Here’s a look at the numbers we track:
Revenues (millions) Q1 Q2 Q3 Q4
2014 1874 1983 1971 2193
2015 2137 2297 2258 2556
2016 2544 2650 2667 2981
2017 2975 3136 3239
EPS (non-GAAP) Q1 Q2 Q3 Q4
2014 0.27 0.28 0.24 0.28
2015 0.29 0.32 0.31 0.36
2016 0.37 0.36 0.35 0.42
2017 0.44 0.46 0.46
2017 Q3 Earnings (Current)
Revenue Growth (billions)
2016 Q3 TTM Revenue = 10.417
2017 Q3 TTM Revenue = 12.331
YOY Revenue Growth = 18.4%, previous quarter 17.5%
EPS Growth (non-GAAP)
2016 Q3 TTM EPS = 1.44
2017 Q3 TTM EPS = 1.78
YOY EPS Growth = 23.6%, previous quarter 19.3%
Non-GAAP P/E (Check Current Price) = 67.25/1.78 = 37.8
1YPEG = 37.8/23.6 = 1.6
PayPal Metrics
Here is a look at some of PayPal’s other important metrics growth:
of active accounts: 218M, +14% YOY
Payment transactions: 1.90B, +26% YOY
Payment transactions per active account: 32.8, +9% YOY
Total Payment Volume (TPV): 114.05B, +30% YOY
Transaction margin: 54.8%
Operating margin (non-GAAP): 20%
Venmo processed $9B TPV, +93% YOY
Cash and cash equivalents: $7.1B
And here’s a look at the historic growth of those numbers:
# of Active Accounts (millions) Q1 Q2 Q3 Q4
2014 148 152 157 162
2015 165 169 173 179
2016 184 188 192 197
2017 203 210 218
Payment Transactions (millions) Q1 Q2 Q3 Q4
2014 918 930 972 1144
2015 1123 1161 1216 1428
2016 1414 1448 1512 1755
2017 1732 1775 1900
Transactions Per Active Account Q1 Q2 Q3 Q4
2014 23 23 24 24.5
2015 25.2 26.1 26.9 27.5
2016 28.4 29.4 30.2 31.1
2017 31.7 32.3 32.8
TPV (billions) Q1 Q2 Q3 Q4
2014 53.676 56.736 58.184 66.039
2015 63.021 67.482 69.738 81.523
2016 81.056 86.208 87.403 99.348
2017 99.327 106.44 114.05
Transaction Margin (%) Q1 Q2 Q3 Q4
2014 65.0 65.7 63.1 63.5
2015 64.2 63.8 62.3 61.1
2016 60.4 59.8 58.7 57.7
2017 56.7 56.3 54.8
Operating Margin (%)(non-GAAP) Q1 Q2 Q3 Q4
2014 18.4 20.4
2015 22.1 22.6 19.9 20.8
2016 21.1 19.9 18.4 21.1
2017 21.6 21.0 20.0
That’s about all I got. Will be back with a review of the conference call in next few days.
Matt
Long PYPL
MasterCard (MA), PayPal (PYPL), Skechers (SKX) and Square (SQ) Ticker Guide
See all my holdings at http://my.fool.com/profile/CMFCochrane/info.aspx